Investment Benefits of corporate bonds

Corporate bonds play an important role in many investment portfolios because:

1.  Corporate bonds offer attractive investment yields

Typically, corporate bonds provide higher investment yields than other comparable-maturity fixed income securities.

2.  Corporate bonds offer Predictable Income

Interest payments on corporate bonds are made semi-annually, providing a predictable source of investment income. Corporate bond interest is subject to federal, state and local income taxes as ordinary income.

3.  Corporate bonds offer Credit Quality

Corporate bonds are backed by the corporations that issue them, many of which are among America’s most respected companies. Is it safe to invest in corporate bonds? Well, it is much more safe to invest in corporate bonds than many types of bonds out there. With all bonds, when investing in corporate bonds, you should pay attention to the corporate bond 's credit qualify. The higher the corporate bond credit rating, the safe the corporate bonds.

4.  Corporate bonds offer a Wide Range of Maturities

Corporate bonds' maturities range from one to 40 years. However, a corporate bond may be callable, returning principal prior to maturity.

5.  Corporate bonds offer investment Diversification

Corporate bonds provide investors with the opportunity to diversify their investment portfolios with familiar names from a variety of industry sectors.

6.  Corporate bonds also offer Liquidity

Corporate bonds typically trade in the over the counter (OTC) market. In addition, some corporate bonds, called “listed bonds”, trade on the New York (NYSE) or American (AMEX) Stock Exchanges. Listed corporate bonds are assigned symbols, like stocks, and are quoted in most newspapers.  

7.  A Low Minimum Investment on corporate bonds

The minimum investment amount is usually $1,000, making corporate bonds an affordable choice for most investors.